Port of Long Beach expansion to create thousands of jobs

LONG BEACH — After a year of negotiations, Port of Long Beach officials have reached a tentative lease agreement with Orient Overseas Container Line on the future Middle Harbor development — a partnership that could make Long Beach the nation's busiest seaport and create thousands of new jobs.

The 40-year lease with the Hong Kong-based container shipping and logistics service company is a $4.6 billion commitment to "the biggest port terminal project in North America," said Port Executive Director J. Christopher Lytle.

"This agreement will allow us to move ahead with construction of the most technologically advanced and greenest terminal in the world," said Lytle, who made the announcement Thursday at his first State of the Port address at the Long Beach Convention Center.

The agreement, which is expected to go before the Harbor Commission on Monday, validates the city's commitment to infrastructure, said Mayor Bob Foster.

"In order for this port to thrive, in order for it to remain the economic engine that it is, we have to expand and we have to be able to move greater volumes of cargo at greater velocities," Foster said.

Foster added that he had spoken to the president of OOCL at the Long Beach Area Chamber of Commerce event, which brought more than 600 city and business leaders.

"He said it's the largest commitment they've made anywhere in the world," the mayor said. "So it demonstrates that we are right in what we said. We're going to plan for the future. We're going to have a port for the future."

OOCL Chief Executive Officer Philip Chow said in a statement that he is very pleased with reaching an agreement with the port to operate the Middle Harbor project.

"It demonstrates our long-term commitment to the Port of Long Beach as the gateway of choice for North America and solidifies our economic partnership with the region," Chow said. "We look forward to seeing the positive impact that this commitment will have for years to come."

Chow declined requests for an interview after the State of the Port address.

Work is already under way on the $1.2 billion redevelopment project, which seeks to fuse two old shipping terminals encompassing 294 acres into a new 345-acre terminal. Improvements will include upgraded wharfs, water access and storage area and an expanded on-dock rail yard from 10,000 linear feet to 75,000, which means less local truck trips, Lytle said.

When completed in 2019, the Middle Harbor is supposed to help improve cargo movement by more than double, cut air pollution by as much as half and add about 14,000 permanent jobs to the local economy, officials said.

"This terminal will be the crown," Lytle said after the event. "It will be the terminal that will represent the highest efficiency, we think, of any terminal in the country. Customers will want to come to that terminal to have their cargo handled there."

The agreement comes at significant time, officials said.

"It's great, especially now with the down economy," Lytle said. "There's a lot of pessimism in the industry, but OOCL is taking that long-term view and looking ahead and realizing that this continues to be a premiere gateway."

OOCL, a Port of Long Beach customer since 1969, would take up roughly 305 acres, and could move into the new space as early as 2016, Lytle said.

"When they're up to capacity, that terminal would equate to the fourth largest port in the U.S. - that terminal alone, when it's up to 3.1 million TEUs (20-foot equivalent units)," Lytle said.

With the Middle Harbor, Long Beach has the potential to overtake Los Angeles as the nation's busiest seaport.

About 6.1 million 20-foot-equivalent containers were moved in 2011 by Long Beach port shipping terminals, while more than 7.94 million cargo containers passed through the Port of Los Angeles last year. If this trend continues and the Middle Harbor reaches capacity, the Port of Long Beach would top 9 million TEUs.

"This lease, if it gets approved, is really going to shape the Port of Long Beach and Long Beach for the next 40 years," said Susan E. Anderson Wise, president of the Long Beach Harbor Commission. "It secures the future for us."